SBI share rises 25% in 2 days; check new target price post Q3 earnings

State Bank of India (SBI) shares hit a fresh 52-week high of Rs 408.35 apiece on BSE, clocking a 25% jump in two days after the company announced its December quarter earnings.

After closing at a 10% upper circuit of Rs 355.10 yesterday, the stock of SBI opened with a gain of 8.7% today at Rs 386, its day's low and touched a new 52-week high of Rs 408.35 in the early session, rising 15%.

In the last five sessions, SBI stock has risen 41.78%. SBI stock is trading higher than 5, 20, 50, 100 and 200-day moving averages. The stock has risen 42% in one month and 45% year-to-date.

Market capitalisation of SBI stood at Rs 3,57,029.08 crore. The stock has touched a 52-week low of Rs 495.25. Shares of SBI, with Rs 1 face value has risen 28% year to date.  

The country's largest lender on February 4 reported a decline of 6.9% YoY in its standalone profit at Rs 5,196.22 crore for the quarter ended December 2020. Sequentially, net profit rose 13.60% from Rs 4,574 cr in preceding July-September quarter.

Net interest income, rose by 3.7% YoY to Rs 28,819.94 crore in Q3FY21. On a QoQ basis, it rose 2.3% from Rs 28,181 crore in the September quarter.  

Lender's gross advances rose 6.7% YoY to Rs 24.56 lakh crore, led by a pre-COVID level growth of 15.5% in retail loans. SBI's gross non-performing assets (NPA) ratio was at 4.77% in the December quarter, while net NPA ratio stood at 1.23%.

JM Financial has a Buy rating on SBI stock with a target price of Rs 350.  

Brokerage CLSA also said it sees up to 58% rally in the stock post Q3 results and added," Now with a dual benign credit cycle from fy22cl, we now expect SBI to rerate materially beyond 1x book. We increase our TP from Rs 385 to Rs 560 which implies 1.2x mar-23 book and Rs 166/share of subsidiary value, with a 'buy' rating to the stock."

ICICI Direct in its note said," We revise our rating from HOLD to BUY with a revised target price of Rs 410 (earlier Rs 290), valuing the stock at 1x FY23E ABV for standalone bank and subsidiaries valued at Rs 132 post holding company discount."

MOFL said in its outlook," Asset quality outlook remains encouraging, with controlled slippages, low restructuring levels, and CE at 96.5% (in line with large peers). The bank is well on track to keep credit cost under control, while recoveries from the resolution of large accounts can further support earnings. We maintain our FY22E/FY23E estimates and project RoA/RoE of 0.8%/14.5% by FY23E. Maintain Buy with a target price of Rs 475/share, implying an upside of Rs 34% from the previous close."

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